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Full text of "Rapid Population Growth Consequences And Policy Implications"

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5.  In an economy suffering from technological unemployment or underemployment, the absorption of idle manpower will be accelerated by the higher rate of capital accumulation and, later, also by the lower rate of labor force growth induced by lower fertility.
6.  In general, achievement of employment objectives pursued by underdeveloped economies, such as the relative expansion of the labor force absorbed by the modem (industrial) sector, will be facilitated.
7.  The shift in factor proportions implied by a faster rate of growth of the capital stock and a slower rate of growth of the labor force will lessen the pressure for interference in the labor market that results in allocative inefficiencies and/or will facilitate the achievement of desired changes toward a more equitable income distribution.
Arguments that dispute the validity of some of these points are usually addressed to the ancillary propositions listed under 1 through 4, or they question the quantitative importance of the effects described. In particular the empirical validity of the saving-investment relationship is often challenged, mainly with respect to individual saving behavior. In a more positive vein, the possibility of compensating adjustments in labor force participation rates is sometimes stressed and, under the evident influence of the historical experience of the developed economies, it is asserted that high dependency rates stimulate individuals to higher efforts in general and that there is a similar positive effect with respect to government behavior as well. Furthermore, it is argued that a faster growing population provides advantages with respect to the flexibility of the economy in adjusting to structural changes, such as in demand, thereby lessening the penalty for erroneous decisions with respect to investment allocation; and that a younger age and skill composition of the labor force and its faster rate of renewal implied by higher fertility has various beneficial economic effects. Finally, the classic arguments concerning economies of scale and specialization are often invoked and connected with population growth functionally, and some authors stress the presumed relationship between population density and technological progress (7, 13).
Such arguments applied to present-day developing countries appear to take little cognizance of circumstances that invalidate or drastically weaken the importance of the mechanisms involved: (a) the prevailing levels of income per head are so low that little additional stimulus may come from further increasing deprivation; (b) the choice for the foreseeable future is not between demographic growth and a stationary or declining population but between fast growth and somewhat slower growth—so any stimulus conceivably flowing from growth will be amply provided; (c) the point just made is even more evident with respect to internal migration and urbanization; (d) the problem in developing economies is the transfer, adoption, and diffusion of already existing technological knowledge rather than the development of new